Cozen Currents: Trump’s Affordable Tariffs

“President Donald Trump has repeatedly said that ‘tariff’ is ‘the most beautiful word in the dictionary.’ And he continues to hold this view despite his begrudging embrace of voters’ own favorite word heading into November’s midterm elections: ‘affordability.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

• Despite the domestic affordability concerns and global disruption they cause, President Trump is unlikely to back away from his use of tariff threats, as they remain his go-to foreign policy tool.
• White House officials are considering a wide range of housing policy actions in an effort to address voters’ affordability worries ahead of the midterms.
• On the surface, it looks like polarization has Congress lurching from crisis to crisis without anything getting done. Look closer, you’ll find that bipartisanship is alive and well — when both sides have the right incentives.

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Why Tariff is Still Trump’s Favorite Word

Trump’s Tariff Addiction. President Trump’s threat of tariffs on several European nations for their opposition to the US’s push to acquire Greenland briefly sparked fears of a trans-Atlantic trade war.

• Trump threatened to impose a 10 percent tariff on the UK, Denmark, Norway, Sweden, France, Germany, and the Netherlands, beginning on February 1. Trump has since backed away from this threat, citing an agreed-upon framework that does not include the US taking control of the island.
• While Trump’s tariff threats are disruptive, they are unlikely to abate as tariffs are his go-to foreign policy tool. In recent months, there have been multiple instances of duties that Trump has threatened through Truth Social posts, but not enacted. The key to avoiding that outcome is to find the off-ramp that allows Trump to claim a foreign policy victory.
• A part of the reason that Trump rushes to threaten tariffs is that he feels they give him a strong negotiating position in these situations. So, some of Trump’s threats are intended only as leverage and not to actually take effect. Understanding which of Trump’s threats fall in that category and which he is serious about enacting is critical to navigating the foreign policy landscape under Trump.

Tariffs and the Affordability Issue. The difficulty for Trump with these tariff threats is to convince voters that they are consistent with his efforts to address affordability.

• In Trump’s mind, the tariffs do not undermine his affordability initiatives, as he believes they will help address affordability in the long term, though there could be short-term pain. As such, Trump is disinclined to significantly roll back any of his current tariffs, and any future adjustments are likely to be mostly on the fringes.
• The challenge for Trump, though, is that this strategy requires voters to give him time for the benefits of these policies to become apparent, and polls increasingly suggest that he is losing ground, with his approval rating continuing to decline. Additionally, tariffs remain largely unpopular among voters, so even if there are long-term economic benefits, the message has yet to resonate with them.

The Supreme Court Lurks. Looming over Trump’s tariff agenda is the Supreme Court’s upcoming decision that could force the president to overhaul the duties he imposed under the International Emergency Economic Powers Act.

• The Supreme Court has not indicated when it may rule on the case, but it is expected to come sooner rather than later, and will happen no later than the end of its term in late June or early July. However, even if the justices strike down Trump’s tariffs, all signals from the White House indicate it intends to reimplement the duties under other authorities, with US Trade Representative Jamieson Greer saying the White House would have new tariffs in place “the next day.” These duties could face their own legal challenges, but these authorities will at least be powers that more clearly allow for the imposition of tariffs.
• With the high likelihood that a decision against the Trump administration will not represent the end of the president’s sweeping tariffs, the most consequential aspect of a decision against Trump will be what, if anything, the court decides on the refund process. While refunds will be welcome news to businesses, the process of claiming them will likely be lengthy and could require additional legal battles, with the White House likely to look to drag out the process as long as possible.

Trump Throws Kitchen Sink at Housing

How the White House Views Housing Affordability. Although the White House believes that the “affordability crisis” is best addressed with better messaging and anticipated larger than usual tax refunds courtesy of the One Big Beautiful Bill Act, there are a number of policy areas where further action is expected, chief among which is the cost of housing.

• For the White House, the elevated cost of homeownership has long been a source of frustration given its intransigence. The frustration is compounded by a feeling that the responsibility for higher costs, particularly as it pertains to mortgage rates, lies with the Federal Reserve and its deliberate pace of rate cuts last year. The electorate is experiencing similar frustration; November polling from Politico found housing to be the second-most frequently sighted affordability concern among adults, running behind only the cost of groceries.
• Armed with the knowledge of these frustrations, administration officials are taking an expansive view of the policy tools they have available to address cost of housing concerns. While many housing policy decisions are decided at the state and local levels, the White House’s willingness to take a more expansive view of executive power is resulting in a broader and more unusual housing policy mix than might traditionally be expected. Evidence of this can be found in recent decisions to utilize Fannie Mae’s and Freddie Mac’s balance sheets to purchase $200 billion in mortgage-backed securities, tightening mortgage spreads, or the use of the two government-sponsored enterprises’ financing tools to cut off aid to large institutional investors who purchase single-family homes.
• With the midterms and the GOP’s slim House majority top of mind for the White House, additional housing policy announcements are expected in the coming months. While not every announcement will become a reality, nor will every policy that is implemented meaningfully lower costs by November, just demonstrating action to voters will be viewed as a positive within the administration.

The Policy Options at the White House’s Disposal. Federal Housing Finance Agency (FHFA) Director Bill Pulte told the Washington Post this month that senior officials have presented 30 to 50 different housing policy ideas to the president in recent weeks, many of which focus on helping first-time buyers.

• President Trump has thrown cold water on the idea of allowing individuals to make penalty-free withdrawals from their 401(k)s for housing down payments in recent days, but a number of other ideas to help first-time homebuyers are floating around the administration. Late last fall, Pulte tasked officials at Fannie Mae with finding a way to lower the upfront fees charged to borrowers known as loan-level price adjustments. The FHFA director has also mused about further options to reduce closing costs with a particular focus on the cost of credit pulls. Separately, mortgage brokers have lobbied the Federal Housing Administration (FHA) to cut the mortgage insurance premium charged to borrowers who utilize FHA loans.
• Alongside first-time buyers, homebuilders are also a focus of the administration. Officials are taking a carrot and stick approach with large builders, hoping to incentivize additional housing construction. In recent weeks, Pulte has threatened a potential ban on stock buybacks for builders that the administration views as lagging behind their construction targets. On the other hand, officials have floated ideas like permitting reforms while outside groups have pushed for a secondary market for construction loans as potential incentives to revitalize the industry.
• Looking even further outside the box, the Washington Post reports that creating portable mortgages, in which buyers can keep their existing terms when changing properties, or expanding the use of assumable mortgages, where buyers can inherit a property owner’s mortgage when purchasing that property, remain on the table, although both face headwinds outside of the administration’s control according to reporting from HousingWire. Expanding the use of Opportunity Zones or pushing Congress to eliminate capital gains on home sales also remain in the conversation.

Bipartisan Legislating Still Happens When Both Sides Benefit

‘I’m Running to Fix the Broken System.’ Congress looks dysfunctional — and largely is. But it’s much less ineffective than most assume.

• America’s legislature set some new records in 2025, some of them dubious. The 38 bills signed into law last year were the least for the first year of a new president in modern times. When President Truman railed against the “do-nothing” Congress in 1948, they had passed 906 bills over a two-year period. The House specifically set a record for the least votes held this century. 24 Republicans and 19 Democrats are retiring or running for another office in the House, another 21st-century record.
• Much of this is driven by partisanship, which Senator Susan Collins (R-ME) called “unlike any other in the time that I’ve served in Washington.” The House almost fell into a censure death spiral. Speaker Mike Johnson (R-LA) repeatedly and intentionally shut down the lower chamber, one time to avoid swearing in a Democratic member whose vote would bring a vote on the Epstein files disclosure to the floor while another to strong arm Senate Democrats into ending the longest government shutdown in history. A majority of Congress supported extending expiring Obamacare tax credits but proved ultimately unable to do so.
• But some of these figures are misunderstood. Yes, fewer laws are being passed, but the total word count of new laws being made remains relatively constant because Congress has been packaging them into bills of greater and greater size. Horses are still being traded, and around the same number too — these fights are just condensing into the handful of “must-pass” legislative actions that happen every year.

The Best-Kept Secret in DC. In areas that are not politically salient or where both sides have an incentive to get something specific done, miracles can still happen.

• They call it the “Secret Congress.” In essence, the theory is that the legislature is generally far more competent than people give it credit for. The reason this isn’t popularly reported on is precisely the reason Congress has room to operate and come to bipartisan consensus in the first place: many of these issues simply lack political salience as a messaging tool. In areas where the average voter (and journalist) is unlikely to care, lawmakers are empowered to come to agreements they otherwise wouldn’t.
• When the incentives of both parties are aligned, mountains can be moved. The ROAD to Housing Act would be the largest federal reform to housing policy in decades, aiming to tackle the political behemoth of inflation backlash for most people’s largest single expense. Republicans and Democrats are knocking on the door of a crypto market structure bill. The SELF-DRIVE Act would revolutionize the regulatory environment governing autonomous vehicles, driven by a coalition of pro-business Republicans and Democrats whose cities are currently testbeds for research and development. Prior to controversy surrounding Immigrations and Customs Enforcement, Congress was incredibly close to passing new full-year funding levels for the entire federal government on a bipartisan, bicameral basis: a surprising development representing no mean feat. The appropriations bill for the Department of Health and Human Services includes long-sought reforms to pharmacy benefit managers in a bid to reduce prescription drug prices despite significant healthcare turmoil over the fate of Obamacare tax credits for months; this is also an example of the final language of strange compromises making their way into one of the giant bills that have to be passed every year. None of these bills are guaranteed to pass. But they do have a real chance, regardless of how gridlocked and partisan Congress may seem.

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